Following up on a report delivered to Congress at the end of June, U.S. Trade Representative (USTR) Robert Lighthizer said last week that the Trump administration wants to move swiftly to start talks on a free trade agreement that goes beyond the African Growth and Opportunity Act (AGOA).
“AGOA has provided an important framework for our economic engagement during these last two decades,” Lighthizer said. “But by 2025—when AGOA is set to expire—it will be a quarter century old and we cannot predict what will happen at that time.”
The USTR said “we should seize the moment” and pursue a new, forward-looking agreement “for the future of U.S.-African trade.”
“This vision should recognize that sub-Saharan Africa looks very different in 2018 than it did in 2000 when AGOA was first created. We believe that there are countries in Africa that are ready to move from AGOA beneficiary to U.S. free trade agreement partner,” Lighthizer said.
“I can assure you that this administration is strongly committed to Africa,” Lighthizer added. “We want to deepen our trade ties so that workers and businesses throughout the United States and across Africa can benefit as much as possible.”
Africa, Lighthizer pointed out, has some of the fastest growing economies in the world and a rapidly expanding middle class. These trends should result in increased demands for American products and services and the U.S. private sector has taken notice, he added.
“We’re seeing this play out in many tangible ways,” the USTR said. “More small and medium-sized U.S. companies are doing business on the Continent—often directly with African businesses, not just with governments and state-owned enterprises. These companies are branching out into new sectors such as information technology and service industries.
Trade in goods between the U.S. and sub-Saharan Africa increased 5.8% to $39 billion between 2015 and 2017, and apparel and textiles played a key role, according to the report to Congress. Total U.S. goods imports from Sub-Saharan African countries under AGOA, including the Generalized System of Preference program, totaled $13.8 billion in 2017 compared to $9.3 billion in 2015.
According to the Sandler, Travis & Rosenberg Trade Report, Lighthizer noted that the U.S. is “not abandoning AGOA for either the short term or the long term.” However, conditions are favorable to move ahead at this time, including increasing investment in Africa by U.S. companies of all sizes, many of which “never before had a large footprint on the continent,” the report noted.
The U.S. is focused on three core objectives, the Sandler, Travis report noted. These are to pursue a bilateral FTA with a willing partner, ensuring that the agreement is crafted to serve as a model that can be rolled out to other willing partners in the region down the road, and making sure that the FTA will reinforce regional and continental integration in Africa.